Legal Question in Tax Law in California

Capital Gains

I bought a house with my roomate. I lived in the house 1 year and 8 months and sold it to him. He wrote me out a check and i signed off on the house by a notary public. Will i have to pay capital gains or can i write the sale off as a loss? How would I show that it was a loss?

Asked on 1/30/04, 8:42 pm

1 Answer from Attorneys

Ken Koenen Koenen & Tokunaga, P.C.

Re: Capital Gains

First of all, you can't have a gain and a loss. One or the other. Next, there are other things ...

1. How much did you pay for the house together?

2. How much did each of you put down?

3. How much did he pay you?

4. The fact that you signed the house over to him does not necessarily take you off of the responsibility for the loan, if you were on the original loan. You may now have no interest in the house, but still on the hook for the loan.

5. You are not entitled to a loss for a residence, even if you sold for less than you paid.

6. You may have some capital gains exposure.

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Answered on 1/31/04, 5:50 pm

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